The New Zealand government is in talks for a deal with the US and 10 other countries that would give foreign investors special rights and protections that they can enforce offshore through Investor-State Dispute Settlement (ISDS) and seek massive taxpayer funded compensation. It is called the Trans-Pacific Partnership Agreement and they want to sign it by the middle of 2015.

Globally there is growing concern over the threats that the massive surge in ISDS cases poses to our national policy space and public budgets. Countries like Germany and France, India, Indonesia, South Africa, Brazil, Venezuela, Bolivia and Ecuador have all taken strong stands against them. Prominent critics now include former World Bank chief economist Joseph Stiglitz, leading investment arbitrator George Kahale, and the Chief Justices of Australia Robert French and New Zealand Dame Sian Elias.

In May 2012 over 100 jurists, including retired judges, attorney generals, and professors signed a letter opposing investor-enforcement in the TPPA.

New Zealand is doing the exact opposite signing up to new obligations with the Korea FTA. The New Zealand government has just signed a trade and investment agreement with South Korea that gives South Korean firms similar rights to sue us if we change our laws in ways that significantly harm their bottom line

New Zealand First has a Fighting Foreign Corporate Control Bill before Parliament that would stop the government including ISDS in any future treaty. The Greens and Maori Party are likely to support New Zealand First’s Bill. Labour has said they will support the Bill to select committee

New Zealand would be following an international trend. The Australian Greens put a similar law before their Senate, as have some Democrats in the US Congress.

Wikileaks posted the almost completed investment chapter of the secretly negotiated TPPA from January 2015. It confirms the New Zealand government has capitulated to US demands, including on ISDS.

‘Investor-state’ disputes are fought at shady multinational investment tribunals, where decisions commonly favour investors and awards often run into the hundreds of millions of dollars.

The Threat At Home

Unlike most other countries New Zealand does not have many agreements with ISDS. Agreeing to ISDS in the TPPA, which includes the US, will allow some of the largest and most litigious companies in the world to sue New Zealand if they think the government has damaged their investment.

  • Veolia, the company that operates Auckland’s train system, recently sued Egypt for US$80 million for raising its minimum wage

  • Newmont, the gold-mining company that operates in Waihi, recently launched a billion dollar claim against Indonesia for regulation requiring domestic processing of raw materials, which resulted in Indonesia accepting a regulatory concession

  • The tobacco companies have threatened to sue the government if it goes ahead with the plain packaging tobacco laws.

Even Business New Zealand said it sees no need for ISDS in countries that have good functioning unbiased domestic courts

We cannot afford to surrender control of our economy to the threats of investors.

Write A Submission Now

TPPA Submission

Submission to the parliament on the International treaty examination of the Free Trade Agreement between New Zealand and the Republic of Korea